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I am a shareholder in a building with 47 units. The sponsor has a one point five million dollar mortgage and a secondary mortgage that he states that it's his retirement money. He owns 12 units in the building and he hasn't filed any financials with the attorney general since 2006. He combined both mortgages on the building. My questions are: 1) Is one point eight million dollar mortgage high for a 47 unit building in Queens; and 2) by law, does the sponsor have to file financials with the attorney general office every year.
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Answer to your questions
(1) Depends - we are a small building with 57 apts but 70K of space ,terraces, two indoor parking garages so our mortgage is quite large as we have to maintain and upgrade our facilities, plant, and equipment. I can’t speak for your building since I don’t know the location and layout and work done or the terms of your underlying mortgage.
(2) Sponsor only has to file amendments with the attorney general if they are actively listing apartments for sale. If they are not actively listing apartments for sale - nothing is required. Our sponsor still owns 55% of apartments 60% of shares, 30 years since the co-op converted, so we are very versed in the requirements.
The sponsor amendment should state the apartments owned, rent roll, any pledges of their shares.
The Board should have a copy of the most recent filing, you can ask the managing agent and/or sponsor when the last amendment was. Most bylaws require a copy of the amendments to be distributed to all shareholders - but this is often not done - and cost is a factor in distribution. So we and the managing agent accumulate for shareholders who ask.
Another way to obtain the most recent sponsor statement - since your sponsor still owns more than 10% of the shares – any refinance or purchase financing from a bank will require the most recent sponsor amendment or questionnaire with the details you seek, you may want to investigate.
My suggestion is ask in writing about amendments and keep investigating, review your budget and underlying mortgage documents, and plan for the future with your fellow board members in a transparent manner.
Good Luck, hope it helps.
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